Margrethe Vestager of the EC said: "Companies and people depend on banks to exchange money to carry out transactions in foreign countries.

"Today we have fined Barclays, the Royal Bank of Scotland, Citigroup, JPMorgan and MUFG Bank and these cartel decisions send a clear message that the commission will not tolerate collusive behaviour in any sector of the financial markets.

"The behaviour of these banks undermined the integrity of the sector at the expense of the European economy and consumers."

The illegal action took place over six years from 2007 to 2013, when the EC's investigation began.

The four banks in the so-called "Banana Split" cartel, which included Barclays, RBS, Citigroup and JP Morgan, were fined £708.6m altogether.

And three in the "Essex Express" group – which got its name because all but one of those involved lived in Essex and would meet on the train to London – were fined £225.1m.

They include RBS, Barclays and MUFG.

Swiss bank UBS was also involved, but not fined after it alerted the EC about the two cartels.

Edinburgh-based RBS said its penalty would be "fully covered by existing provisions", while Barclays also said it had allocated funds for the fine.

Meanwhile, at the Lloyds AGM in Edinburgh on Thursday, chairman Lord Blackwell admitted criminal activity uncovered a decade ago had "cast a long shadow" on the group, undermining trust.

The comments pertained to fraud committed at HBOS Reading, when some small businesses were wrongly classed as high risk and passed to the lender's Impaired Assets Division.

Shareholders also heard the group, which includes the Bank of Scotland and Halifax and is headed by chief executive Antonio Horta-Osorio, stands by high salaries for executives.

One shareholder said: "Greed is good – no it's not. It's not good for the individual or for society.

"Fair pay is good. Paying people hundreds of thousands and even millions of pounds a year where we have food banks and people on benefits is wrong in a civilised society."

Blackwell said directors have "earned through their performance the rewards that they are entitled to".

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